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2014 (8) TMI 630 - HC - Income TaxPower of Income-tax Settlement Commission u/s 245D(2C) – Commission postponed to deal with the validity of application - commission held that the objection raised by the petitioner (Revenue) would be considered at a subsequent stage, i.e., at the time of final hearing under section 245D(4) - full and true disclosure of its income by the assessee - Held that:- once it is held that the issue of true and full disclosure in the application for settlement is a jurisdictional issue and in the absence of its satisfaction jurisdiction cannot be exercised by the Commission, it follows that mere participation in the proceeding by the parties cannot by itself bestow the jurisdiction on the Commission - The exercise of jurisdiction by an authority when not so vested in it is open to challenge and participation in the proceeding will not confer any jurisdiction as held in Carona Ltd. v. Parvathy Swaminathan and Sons [2007 (10) TMI 606 - Supreme Court of India]. There is a statutory change consciously made by Parliament in 2007 in Chapter XIX-A of the Act in respect of application for settlement whose validity has to be decided under section 245D(2C) of the Act and cannot be postponed. Even if the application for settlement is declared to be valid in terms of section 245D(2C) of the Act, yet it would not estop/bar the Commission from rejecting the application for settlement at later date for non-disclosure of true and full information of the income or the manner in which income was derived. As the requirement of full and true disclosure of the income and the manner in which the income is derived is a requirement to be satisfied by the applicants at all times before the Commission. However, this by itself would not permit the Commission not to deal with the validity of the application at the stage of section 245D(2C) of the Act. Matter restored before the Commission to decide the validity of the applications for settlement dated January 31, 2013, filed by the applicants under section 245D(2C) of the Act after taking into consideration the report filed by the Commissioner (petitioner) under section 245D(2B) of the Act read with rule 6 of the Settlement Commission Procedure Rules - Decided in favor of revenue.
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